A US soldier in riot gear watches former Iraqi soldiers waiting to collect payments in Baghdad. (Reuters)

Baghdad, Oct. 4 (Reuters): Unemployed former soldiers in Saddam Hussein’s disbanded army clashed with occupying troops in Baghdad and the southern city of Basra today in violent protests that left at least two Iraqis dead.

The British army said one of its soldiers shot dead an armed Iraqi during an angry demonstration in Basra by hundreds of men who had gathered to collect redundancy payments after being laid off from the Iraqi military. Major Simon Routledge said a British soldier heard gunfire and then shot and killed an Iraqi holding a weapon. British troops also fired rubber bullets to disperse the crowd.

Hundreds of former Iraqi soldiers also rioted at a disused airport in Baghdad where redundancy payments are handed out. They hurled rocks and rushed towards US soldiers who beat them back with batons and fired shots in the air.

Officials at a nearby hospital said one Iraqi had been killed and several wounded in the violence. The US army said two of its soldiers were wounded.

The US-led administration in Iraq disbanded the country’s army in May, sparking several angry demonstrations by soldiers who said they faced destitution in a country whose economy has been battered by war and years of dictatorship and sanctions. The administration later agreed to pay compensation to the hundreds of thousands of men who had served in the army.

Washington is setting up a smaller military force to take the place of Saddam’s bloated army. Today, the first recruits in the New Iraqi Army graduated from basic training. “Gone is the brutality of the old regime,” Iraq’s US governor, Paul Bremer, said in a speech at the graduation ceremony. “The New Iraqi Army will be responsible to its citizens and will serve to protect Iraq from external threats.”

Late yesterday, guerrillas attacked a US convoy near Baghdad with gunfire and rocket-propelled grenades, killing a 4th Infantry Division soldier and wounding another, the US army said. It said American troops pursued the attackers, killing two and wounding one.

At least 85 US soldiers have been killed in action in Iraq since Washington declared major combat over on May 1.

Missile fracas

Poland apologised to France today for claiming that its troops had found advanced French-made missiles in Iraq that had been produced this year.

The report sparked strong criticism from French President Jacques Chirac, who called it wrong and drawn up without proper checks.

However, neither Polish nor French authorities denied that the Roland-type anti-aircraft weapons were discovered near the Iraqi town of Hilla in a zone controlled by the Polish force.